The Capital Markets Authority (CMA) has said that Cytonn High Yield Solutions (CHYS) does not fall under its regulatory scope. In a notice of motion, the regulator said that it did not approve, authorize, or regulate CHYS.
CMA was responding to a suit where Kenneth Kasinga, an investor with CHYS, had moved to court seeking to compel the regulator to audit Cytonn High Yield Solutions. In his suit, Kasinga said he had invested Ksh3 million on 3 October 2019 expecting a 19 percent interest per annum until maturity by September 7, 2020.
In matters before the court, the plaintiff says Cytonn changed the contract from a public to a private offer, to escape scrutiny from the Capital Markets Authority (CMA). He alleges that the Cytonn rescheduled the periodic interest payable and extended the investment for 12 months. He therefore says that he may suffer irreparable loss should Cytonn sail through with the contractual amendments.
CMA was enjoined in the suit as the second defendant but the regulator on Friday asked to be dropped as one of the defendants. CMA said that it only regulates the Cytonn High Yield Fund.
In April this year, CMA issued a notice saying that the only licensed entity is Cytonn Asset Management Limited, which is licensed as a Fund Manager and a Real Estate Investment Trust (REIT) Manager.
The funds managed by Cytonn under the approved Collective Investment Schemes are; Cytonn Money Market Fund; Cytonn Balanced Fund; Cytonn Equity Fund; Cytonn Africa Financial Services Fund; Cytonn Money Market Fund (USD); and Cytonn High Yield Fund.
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